Pensions Week articles from March 2009

Pensions Week archives from March 2009

News: Employers seek to bypass trustee consent.
March 2, 2009... Byline: Tom Willetts Employer groups are calling for the government to allow companies to stop linking deferred and pensioner benefits to inflation without trustee or member consent. The Confederation of British Industry (CBI), the...

News: Pensioners could profit from deflation offset.
March 2, 2009... Byline: David Rowley Aon Consulting is calling on the government to consider whether deflation can be offset against future inflation when increasing pensions in payment. The consultant reasons that pensioners will see their purchasing...

This week: Fred's chamber of secrets.
March 2, 2009... Byline: David Rowley - Editor A few years ago, I was writing an article about a top FTSE 100 company's excellent, best practice, forward-thinking flexible benefits scheme, when I found out by chance there was a special flex scheme for...

News: Tesco pays price for increased longevity.
March 2, 2009... Byline: David Rowley Tesco is asking its employees to pay more into their final salary and career average schemes to factor in the cost of increased longevity. Those in Tesco's career average scheme are being asked to pay 5% instead of...

News: Multiple changes for DB members of the BT scheme.
March 2, 2009... Byline: Charlie Kirby The BT pension scheme has revealed details of changes for its final salary members. The communications giant has brought in the changes to keep its final salary offering affordable, sustainable, competitive and...

News: Goodwin's platinum pension looks airtight.
March 2, 2009... Byline: Charlie Kirby Fred Goodwin, the former chief executive of Royal Bank of Scotland (RBS), is in line to receive a total pension of up to GBP25m. According to RBS' new chief executive, Stephen Hester, Goodwin will receive a...

News: Fifth of council tax goes on pensions.
March 2, 2009... Byline: Charlie Kirby One pound in every five paid in council tax is being spent on employer contributions for local government pension schemes. Data compiled by The TaxPayers Alliance shows local authorities across the country spent a...

News in brief.
March 2, 2009... Swiss Re, the world's second largest reinsurance company, is to close its UK life and pensions business after less than a year's operation. The firm, which is an investor in Pension Corporation, had planned to offer derisking and bulk...

News: Royal Mail highlights need for sponsor clarity.
March 2, 2009... Byline: Charlie Kirby Royal Mail's pension funding crisis has highlighted the need to balance employer covenants with asset allocation strategies, according to investment advisers. The GBP22bn fund has more than GBP5.5bn invested in...

News: More detail on regulator's code required.
March 2, 2009... Byline: Tom Willetts The Pension Regulator's code of practice on anti-avoidance powers requires clarification, according to Mercer. The code specifies the circumstances when the regulator would issue a contribution notice under powers...

News in brief.
March 2, 2009... Fund managers have been warned to take precautions against "an impending wave of compensation claims" by a risk consultancy firm. Protiviti said policies and procedures should be under review to reduce the risk of financial loss or...

News: Calls for phase-in to soften blow of PAs.
March 2, 2009... Byline: Tom Willetts The introduction of personal accounts is expected to cost businesses across the UK close to GBP3bn a year, according to Mercer. The warning on costs has been echoed by Watson Wyatt in its call for businesses to...

News: Dean charged with PADA development task.
March 2, 2009... Byline: David Rowley The Personal Accounts Delivery Authority (PADA) has appointed Helen Dean as its policy and product development director. Her key responsibilities are defining the requirements for the procurement of the...

News in brief.
March 2, 2009... Fidelity International, Aegon Scottish Equitable, Standard Life, Scottish Life and Scottish Widows have scored top marks in a review of their pensions' e- commerce capabilities. The five firms achieved the top 'eee' rating from the...

News: Global group urges reform at US firms.
March 2, 2009... Byline: David Rowley The Universities Superannuation Scheme (USS) has joined other global investors to call on President Barack Obama to implement "critical" reforms at US companies. The investors, with assets totalling over $1.3trn...

News: FTSE 350 audit teams lack experience.
March 2, 2009... Byline: Nick Reeve More than one in seven FTSE 350 companies have failed to identify anyone on their audit committee with recent and relevant financial experience. Grant Thornton's corporate governance review has highlighted several...

News in brief.
March 2, 2009... Leading hedge funds are to sign up to an initiative that will see them offer more disclosure of their 'significant positions'. The Alternative Investment Management Association, whose members manage more than 75% of hedge fund assets...

In depth: Gaining ground.
March 2, 2009... Byline: David Rowley "People who have swap positions have seen markets fall and liabilities rise and have taken out tens of millions of pounds of profits from those swaps. They have then gone into the market and bought government...

In depth: Shareholder action, not more regulation.
March 2, 2009... Byline: Clive Gilchrist - Managing director, Bestrustees "Shareholders are owners of the business and have a responsibility that extends beyond the buying and selling of shares," and non-executive directors "should pay particular attention...

In depth: Personal view - A rigid approach to age regulations will not benefit many in a recession.
March 2, 2009... Byline: Edward Brown One of the great uncertainties for pensions practitioners when advising on the implications of age discrimination regulations is the concept of objective justification: age discrimination can be justified if the...

In depth: Jargon buster.
March 2, 2009... Value at risk (VaR) A mathematical estimate of the effect of very unlikely events on your portfolio. Asking the question: how bad can it get? Developed in large investment banks, these models try to work out how much risk they have in...

In depth: Technical view - Why Scottish pensions are different.
March 2, 2009... Byline: David Davison Following the 250th anniversary of his birth, it seems appropriate to recall that it was Rabbie Burns who wrote: "Fair fa' your honest, sonsie face, Great chieftain o the puddin' race! Aboon them a' ye tak your place,...

In depth: My life outside pensions.
March 2, 2009... Byline: Andrew Mewis - Director, total rewards and benefits team, Deloitte How does a life as a pensions professional fit in with a passion for skitting across the water? Andrew Mewis, director in Deloitte's total rewards and benefits...

In depth: Notice board - NAPF seminars and conferences.(Conference news)
March 2, 2009... The NAPF's annual hot topic seminar Regulation rendezvous is designed to help ensure you are kept informed on pensions policy and regulation. Speakers include Lord McKenzie, parliamentary under-secretary of state; Joanne Segars, chief...

Trusty30: DB pensions affordability.(Survey)
March 2, 2009... 01 - Is section 75 an issue for your company this year? While section 75 is an acute problem for companies that are planning internal reorganisations this year, the feedback we had was that actually most are not making such moves, perhaps...

On the move: Mercer sees benefit with Ross and White.
March 2, 2009... Byline: Nick Reeve Mercer has appointed Claire Ross and Andy White to senior positions as it looks to expand its UK benefits outsourcing business. Ross will take on the role of head of service implementation, while White becomes...

On the move: Going places.
March 2, 2009... Lawyers set to boost pensions team The law firm Field Fisher Waterhouse has appointed pensions law specialists Christine Brightwell and Lee Harding in a move to expand its employment and pensions group. Brightwell, who joins from...

On the move: Recent moves.
March 2, 2009... 01 - Alan Pickering and Chris Swinson NEW - The pair were the inaugural non-executive directors of the Pensions Regulator. They have both had their contracts renewed as of February 8. Tel: 01273 811800 02 - Jos Vermeulen and Pam...

News: Corporate bonds lose favour as funding gauge.
March 9, 2009... Byline: Charlie Kirby & David Rowley Concerns about the prudence of using corporate bonds as a measure of pension fund liabilities is leading schemes to switch to gilts-based measures. A survey by Hewitt Associates found that all of...

News: GBP75bn injection to have triple impact on pension funds.
March 9, 2009... Byline: Charlie Kirby The quantitative easing strategy employed by the government will impact on pension schemes in three ways. Joe Moody, head of liability-driven investment at State Street Global Advisers, said by injecting money...

This week: Going our separate ways.
March 9, 2009... Byline: David Rowley - Editor There is a famous article, written by US journalist Lester Bangs in August 1977, that laments the passing of Elvis Presley. Unlike other obituaries, Bangs found that the saddest part about his death was the...

News: Sainsbury's bags a good deal on revaluation cap.
March 9, 2009... Byline: David Rowley Sainsbury's has taken advantage of new rules that allow it to limit revaluations of future deferred pensions from an annual cap of 5% to 2.5%. After April 6, any pension built up by members who subsequently leave...

News: Forced retirement at 65 in the UK given amber light.
March 9, 2009... Byline: Charlie Kirby The European Court of Justice has confirmed legal predictions by ruling that employers could enforce retirement at age 65 provided it was "appropriate and necessary". Presiding over Age Concern's Heyday claim, the...

News: Deficit increase forces C of E to consider DC.
March 9, 2009... Byline: David Rowley Employers covered by the Church of England (C of E) Pensions Board face a rise in their contribution rate to 50%-60% of earnings. The warning was made in a special paper from the board on the impact of the credit...

News: Cheaper buyout quotes for small schemes.
March 9, 2009... Byline: Charlie Kirby MetLife and Barnett Waddingham are offering smaller schemes the chance to obtain quotes for buyout for a GBP1,000 one-off payment. Under a new partnership deal, both will provide a service for schemes between...

News in brief.
March 9, 2009... A growth in alternative investing by pension funds means they now own one-sixth of all assets held by hedge funds. Figures from the Alternative Investment Management Association (AIMA) also show that for the first time institutional...

News: Pension firms avoid wholesale staff cuts.
March 9, 2009... Byline: Nick Reeve Job confidence in the pensions industry remains high despite redundancies at a few firms, recruitment consultants have revealed. Continuing industry growth is supporting the job market, as companies prepare for the...

News: Youth is on your side with personal accounts.
March 9, 2009... Byline: Nick Reeve Government data has revealed a disparity between how much old and young low paid workers will benefit from personal accounts. A 52-year-old earning GBP11,500 a year and saving 8% into a pension from 2012 until...

News in brief.
March 9, 2009... Xafinity Paymaster has told the Personal Accounts Delivery Authority (PADA) to engage in an "in-depth communications exercise" ahead of auto-enrolment in 2012. The firm, which is bidding for the personal accounts administration contract,...

News: Switch to bonds comes good for JLT.
March 9, 2009... Byline: David Rowley The Jardine Lloyd Thompson Group (JLT) has cut its pension fund deficit after a big switch from equities to bonds between April and June last year. The GBP365m fund, which closed to new accrual in 2006, sold half...

News: Apple gets to core of communications with text service.
March 9, 2009... Byline: David Rowley Apple UK is to launch one of the first defined contribution schemes that can alert its members by text of key events and investment changes. The computer and iPod distributor has brought in a web and email...

News: Retirement scotched by diminishing funds.
March 9, 2009... Byline: David Rowley Around 2.2 million adults plan to delay their retirement because of the falling value of their investments, Prudential estimates. The figures from the insurer's annual retirement survey, which covers UK adults aged...

News: DC investors lose 3% a year in decade.
March 9, 2009... Byline: David Rowley Employees who have paid 5% of salary into defined contribution (DC) schemes for 10 years, will now have pension pots lower than their total contributions. PricewaterhouseCoopers (PwC) has made the calculation...

News: Prudential deals lead to growth in 2008.
March 9, 2009... Byline: David Rowley Prudential's UK corporate pension sales rose by 1% over 2008 to GBP249m. Much of its growth came from securing Nationwide's deposit-based additional voluntary contribution (AVC) business, which has strengthened...

News in brief.
March 9, 2009... ExactVAL, the pension valuations specialist, has launched a service to identify areas where significant cost reductions can be made in scheme valuations. Bill Harris, managing director and founder of ExactVAL, said: "ExactVAL's business is...

In depth: Deal or no deal?
March 9, 2009... Byline: Charlie Kirby "The Harriet Harman line about Goodwin losing in the court of public opinion, 'so let us take back his cash', was populist political nonsense." It's not often that pensions lawyers speak so passionately about the...

In depth: Decisions, decisions...
March 9, 2009... Byline: Sarah Smart - Independent consultant and trustee In my previous column I concluded life was better lived without regrets. I must confess that I had trouble putting this into practice when I was travelling during the recent snowy...

In depth: Personal view - DB risk strategies: buy-in, buyout or a journey management process?
March 9, 2009... Byline: Timothy Lyons In 2006, most articles about the UK defined benefit (DB) pensions market focused on scheme deficits, and the insurance market predicted a major shift to bulk annuity buyout. Three years later, the annual volume of...

Jargon buster.
March 9, 2009... Weighted average cost of capital (WACC) How much a company's funding costs it, taking into account the returns required by investors on both its equity and its debt. Whistleblowing An obligation on many of those in any way...

In depth: Technical view - A safety net for schemes' assets.
March 9, 2009... Byline: Katherine Wing & Clive Pugh Among sponsoring employers of occupational pension schemes, contingent assets are increasingly being used to provide support. A contingent asset is simply an asset in reserve, acting as a contingency...

In depth: Governance - The bear is leaving the building. Possibly.
March 9, 2009... Byline: Mike Fox February and March are always the busiest two months of the year for investors, as companies whose financial year ends in December report their results. This period gives investors an opportunity to improve their...

In depth: Without prejudice.
March 9, 2009... Byline: Clive Pugh - Partner, Burges Salmon The bright side The recession is providing pension schemes with new opportunities. I am not being glib. Like everyone in the industry I am working daily with employers and trustees facing...

In depth: Notice board - NAPF training.
March 9, 2009... Training essentials Designed for a wide range of people involved in workplace pension provision, NAPF courses are independent and have a reputation for quality. Upcoming courses include: Inside investment NAPF, Westminster, March...

Pensions workout: Beginners - Private equity - Beginners' level.
March 9, 2009... Private equity can broadly be defined as investments in equity or equity-like securities in non-publicly traded companies. These investments can be made at different stages of a company's lifecycle. Venture capital investment involves...

Roundtable: To what extent do pension funds now have an absolute return focus, rather than a relative return focus?
March 9, 2009... The panel Chris Edge - Chief executive, AllenbridgeEpic, Investment Advisers Paul Bourdon - Head of client relations, Insight Investment Sonja Uys - Product specialist, alternatives, Insight Investment Steve Mingle Director,...

On the move: Dixon transfers his skills to Inalytics.
March 9, 2009... Byline: Nick Reeve Inalytics has appointed Graham Dixon as a director, to specialise in transition management. The manager evaluation firm brought in Dixon from Credit Suisse, where he was managing director and head of European...

On the move: Going places.
March 9, 2009... Jones heads back to Hammonds as associate Hammonds has appointed Carol Jones as a senior associate to its London pensions practice. Jones joins from Pinsent Masons, where she was an associate for three years, after training and...

Recent moves.
March 9, 2009... 01 - Claire Ross and Andy White OLD - Ross was at Watson Wyatt, White was at Standard Life NEW - They join Mercer's service implementation team as head and programme manager respectively Tel: 01243 532000 02 - Glyn Jones ...

Special Supplement: DCintelligence - Introduction.
March 9, 2009... Byline: Charlie Kirby - Deputy editor Default funds can be a hard sell. Their very title implies they should be a safe option for pensions, the option that everyone should be okay in. However, in the litigious climate we find ourselves...

Special Supplement: DCintelligence - BT offers added value with corporate Sipp.
March 9, 2009... Byline: Charlie Kirby Communications giant BT has made a raft of changes to its defined contribution (DC) scheme. Standard Life has been appointed to run a group self-invested personal pension (Sipp) scheme that will replace an...

Special Supplement: DCintelligence - Pension pots worth less than contributions.
March 9, 2009... Byline: David Rowley Employees who have paid 5% of salary into defined contribution (DC) schemes for 10 years will today have pension pots lower than their total contributions. The calculation has been made by PricewaterhouseCoopers...

Special Supplement: DCintelligence - News in brief.
March 9, 2009... Two out of three contract-based DC schemes in the FTSE 100 offer 50-plus investment options to members. By contrast, according to Watson Wyatt's annual FTSE 100 DC Pension Plan Survey, less than 3% of trust-based DC schemes offer 50-plus...

Special Supplement: DCintelligence - Scheme members to get text updates.
March 9, 2009... Byline: David Rowley Apple UK is to launch one of the first defined contribution schemes that can alert members by text of key events and investment changes. The computer and iPod distributor has brought in a web and email approach to...

Special Supplement: DCintelligence - Tracker reveals huge drop in asset values.
March 9, 2009... Byline: Charlie Kirby Aon Consulting has launched a monthly tracker chart that shows the movements of GBP550bn worth of defined contribution (DC) assets between September 2007 and the end of January 2009. Aon's DC tracker shows how the...

Special Supplement: DCintelligence - News in brief.
March 9, 2009... Hewitt's 2008 Defined Contribution Pension Survey has found that a significant number of schemes do not use matched contributions or a structure that automatically escalates with age or active investment management. The consultant values...

Special Supplement: DCintelligence - Welcome the rebirth of DC default.
March 9, 2009... The Pensions Regulator's increased interest in the governance of defined contribution (DC) schemes in particular their investment options is proof that DC has become a mainstream option for UK employers. DC, once the like-it-or-lump-it...

Special Supplement: DCintelligence - Talking heads.
March 9, 2009... 1 - What product innovation can we expect to see in default funds in response to the awful investment returns of 2008? 2 - Is there a future in institutional pensions for lock-in gains products, such as those in the retail market? 3 -...

Special Supplement: DCintelligence - Derisking default.
March 9, 2009... Byline: Dietrich Hauptmeier In partnership with FT Pensions and Investments Group, PensionDCisions conducts an annual survey of the defined contribution (DC) default solutions advocated by leading providers in the UK. In 2008, 14 providers...

Special Supplement: DCintelligence - Head to head.
March 9, 2009... Representing lifestyle funds Ian Richards, head of DC strategy at Legal & General Investment Management Representing diversified growth funds Steve Bowles, head of DC at Schroders Q: Could you explain a little of the history for your...

Special Supplement: DCintelligence - Achieving the right blend.
March 9, 2009... Byline: Mark Rowlands Ablended fund is fundamentally a mixing together of a number of individual funds into one: one price, one charge and one set of performance data. Trustees, with advice from their investment consultants, can have a...

Special Supplement: DCintelligence - Company focus - A word from the sponsor...
March 9, 2009... Background Axa UK is part of the Axa Group, one of the largest groups in the world by revenue(i). Axa's operations are diverse geographically, with major operations in western Europe, North America and the Asia/Pacific area. Axa has around...

Special Supplement: DCintelligence - Natural flow.
March 9, 2009... A lot has happened in the world of employee benefits over the last few years. Pension provision in particular has gone through a sea change, with some interesting waters to chart along the way. This article is not an attempt to retrace...

Special Supplement: DCintelligence - Company focus - A word from the sponsor...
March 9, 2009... Background At Standard Life we want to lead the way in which people think about employee benefits; how they can help businesses reward employees, and how employees can plan better futures. We believe we are showing the way forward by...

Special Supplement: DCintelligence - One idea.
March 9, 2009... Mark Rowlands Head of corporate partnerships Axa Corporate Benefits The current turmoil creates a doomsday scenario for some defined contribution (DC) members, with plunging equity values, historically low interest rates and a...

Special Supplement: DCintelligence - Engaging in DC.
March 9, 2009... There is no denying that recent developments in the global financial markets have had a significant impact on occupational pension schemes. Naturally the public eye has been drawn to the immediate and highly visible issues of falling assets,...

News: Temp firms face opt-out nightmare.
March 16, 2009... Byline: Charlie Kirby The draft regulations for auto-enrolment could force many recruitment agencies to put temporary staff into personal accounts. Anne Fairweather, head of public policy at the Recruitment and Employment...

News: Myners strikes out against poor governance.
March 16, 2009... Byline: Tom Willetts City minister Lord Myners has ignited a storm of protest after suggesting pension schemes and fund managers should be obliged to exercise their voting rights. Speaking at the National Association of Pension Funds...

This week: The epoch of incredulity.
March 16, 2009... Byline: David Rowley - Editor If the green shoots of recovery are appearing, as legendary fund manager Anthony Bolton says on page 7, then those looking to use the downturn as an excuse for cutbacks in DB should act fast. The upside to the...

News: Property fails to pay off for large schemes.
March 16, 2009... Byline: David Rowley Large pension funds were the biggest relative underperformers of all UK commercial property investors over 2008, according to the Investment Property Databank (IPD) Annual Index. UK commercial property returned...

News: LPFA weighs up benefits of shift to longevity hedging.
March 16, 2009... Byline: Chris Newlands The London Pension Fund Authority (LPFA) is considering a shift from interest and inflation-linked swaps to longevity hedging for its GBP1.1bn pensioner fund. The fund has been run since 2006 on a...

News: BoE gilt investments will increase deficits.
March 16, 2009... Byline: Charlie Kirby The Bank of England's (BoE) decision to buy gilts will worsen defined benefit (DB) schemes' deficits and their relationships with sponsors, according to industry experts. On March 11, the BoE bought GBP2bn worth...

News: Habitat moves to SEI for fund management.
March 16, 2009... Byline: David Rowley Habitat has outsourced the management of its 75% funded, GBP24m final salary plan to SEI on a fiduciary basis. SEI will replace the pension scheme's existing investment consultant and individual investment managers...

News in brief.
March 16, 2009... Assets in DC plans lost 10% of their value during February, according to Aon Consulting. The Aon DC Pension Tracker, which measures the asset value of 3.7 million UK workers' pension accounts, has shown a fall from GBP410bn at the end of...

News: Myners urges funds to focus on governance.
March 16, 2009... Byline: Owen Walker Paul Myners has appealed to pension funds and other institutional investors to take governance seriously to address frailties in the economy. "The penny has dropped in that sound governance is not a 'nice to have'...